Make Sure What You Insure Stays Insured

Insurance can be a tricky business, as it seems like there is always some get out clause the insurance company can use to avoid paying you the money they owe.

Hurricane Katrina provides a good example of this. Despite many residents having home insurance which protected them against hurricanes, most did not have flood protection (something which is not included in a standard home insurance policy).

After the hurricane was over and many homes had been destroyed, the residents of New Orleans began to file insurance claims for their property.

However, rather than receiving a big check which they could use to rebuild their home, they were told that they would not receive any money because they were not covered against floods.

Basically, the insurance companies told them that it wasn’t the hurricane which destroyed their home, it was flooding, and so they would receive no financial compensation.

As a result of the insurance companies refusal to pay out these claims, many residents of New Orleans are now homeless and have little or no money to support themselves with.

Make Sure Your Insurance Policy Covers You

Hurricane Katrina showed just how careful you have to be when it comes to taking out an insurance policy, because if you don’t understand what you have signed up for, you may think you’re covered, but later on find out you’re not.

Failure to receive adequate coverage from your policy can unknowingly expose to you a great amount of risk which could later prove to be very costly as the residents of New Orleans found out.

For this reason it is absolutely essential that you fully understand the type of coverage you are receiving from your policy, and the things you are not insured against. If you are unsure of this, ask your insurance agent and they will be able to fill you in on all the details.

If you do find that you are not adequately covered by your existing policy, then you may seriously want to consider taking out extended coverage to protect you against specific forms of risk.

The types of risks you will be exposed to can vary depending on where you live, and if you are unsure of what these risks are, then speaking to your agent again should help you to develop a comprehensive policy that protects both you and your finances.

Be careful however not to fall into the trap of becoming overly paranoid, as an agent may simply try to sell you more coverage in order to make a commission on that policy.

It is therefore usually a good idea to cross reference what they tell you with another source, just to ensure that you are being given accurate information and that you are indeed vulnerable to particular kinds of risks that you would benefit from insuring yourself against.

Staying Covered Financially

Even if you do have a fully comprehensive policy, you may sometimes find it difficult to get exactly what your insurance policy promised it would provide in the event of a claim.

This can occur for a variety of reasons, although by far the most common reason for insurance claims being rejected is due to inadequate preparation prior to and during the claims process.

So if you can get this part right, then you should find that your claims process runs a lot more smoothly and you end up getting all the money you need to recover from your loss. But unfortunately, this isn’t always guaranteed to happen.

If you have fully documented your claim, and are insured against a particular loss, sometimes you may discover that your insurer is unwilling to pay out the full amount that you think you are entitled to. This is obviously not a very desirable situation to be in, because it means that you will suffer an out-of-pocket loss which could turn out to be an amount that you cannot afford to pay.

The good news is that for both of these situations there are certain things you can do to increase your chance of making a successful insurance claim. Below, we provide some simple tips on how to do this.

1) Document Any Losses

Anything that you have insured that becomes damaged document as best you can.

For example, if you are in a car accident take the name of the driver, their licence number, address, make of car and contact details of any witnesses who saw the accident.

If your property is damaged, take pictures of the damage or record it using a video camera. If it is appropriate, file a police report and get the police involved so that they can document it themselves.

Finally, for any damage that you wish to claim on insurance, get several estimates on what it will cost to repair so that you can then present a reasonable figure to your insurer for your claim.

2) Get What You Are Owed

When you file an insurance claim someone will come to assess the damage, and you will then be told how much your insurer is willing to compensate you for.

Sometimes the amount that you are offered is lower than what the repair actually costs. If this occurs, find out why you are not being offered the full amount and provide evidence which supports your initial claim.

This could include receipts or estimates you have received from other people. If they still refuse to offer you more, ask to speak to a supervisor or manager to get the amount you are entitled to.

3) Preparing Your Insurance Claim

If you file an insurance claim, the first thing you should do is to make sure that your policy actually covers you for your loss. If it doesn’t, then there is little point in filling a claim.

If at any time you write to or speak with your insurer, make sure that you keep a record of all communication you have had with them should you need it for future reference.

4) Get Legal Help

If your claim has been refused for a major loss and you are unable to rectify the situation by yourself, hire a lawyer who specializes in insurance concerns.

This will obviously be expensive, but if there is a significant amount of money involved then it will be worth doing. In some cases, you may later be able to claim back your legal fees against your insurer should the court rule in your favor.

5) Remember, It’s A Business

An insurance company is a business, and they are there to make money not to make friends.

So always be absolutely clear as to what your policy covers you for, because if there is a way the insurance company can avoid paying you, they will use it.

Hurricane Katrina victims have experienced first hand just how ruthless the insurance companies can be.

So remember that no matter how nice the salesman was when you were sold your policy, business is business, and so you better know what you are doing because they certainly do.